Keeping pace with life’s changes

Marriages, mortgages and major relationships

A long-term relationship entails a commitment to share certain financial obligations. Take some time to discuss your financial goals as a couple. What dreams do you share and what plans do you need to make to achieve them? Are you purchasing a property together? A mortgage is one of the biggest financial obligations you can take on. You may want to update your life insurance to cover the amount required to pay off the mortgage should something happen to you. Similarly, consider if you need to change the beneficiary of your super to your partner.

Planning for your future together can be a little easier if you’re both with the same super fund. ESSSuper allows eligible spouses to join the fund by opening an ESSSuper Accumulation Plan account.
If you make any contributions on behalf of your spouse, and they earn less than $40,000 per annum, you may receive a tax rebate. You can also take advantage of ‘contribution splitting’ that allows you to split up to 85% of your pre-tax contributions with your partner.¹

Babies, toddlers and teens

Nothing changes things up like having a baby. Having a young family changes your priorities and often means one partner needs to take time off to look after children. But as a member of the ESSSuper Defined Benefit Fund, taking paid parental leave doesn’t have to impact negatively on you. Your paid parental leave is regarded as ‘normal service’. So during this time, your super benefit will continue to accrue in line with your chosen contribution rate. This applies each time you take paid parental leave, and helps ensure you’re not disadvantaged by caring for a young family.

However, taking further unpaid parental leave will affect your contribution rate and limit your insurance cover. As the kids grow from toddlers into young adults, it’s a good idea to check that your financial arrangements, such as life insurance, continue to reflect your needs. Consider how much your family would need for housing, food and education if you weren’t there to provide an income.

Separation, divorce and re-partnering

A good way to save is to put aside a set amount each time you’re paid. It could be the equivalent of a chocolate bar a day, or you could commit 10% of your salary. If you get a salary increase, commit a portion of it towards your savings. And while you may have a million things you’d like to spend those savings on, putting a little more into super, can be a smart thing to do.

Become a super smart saver

Relationship breakdowns have a major financial impact on both partners. It’s a time of great stress on everyone, and you don’t want to add to that with confusion over finances. So do a financial stock take of your situation. Check your will, your life insurance and super. When relationships breakdown, the law says that super can be divided between the two parties. Do you need to update the beneficiaries of your super you have previously nominated? Because things can get complicated if something were to happen to you after the split – especially if you re-partner. If you want control over who receives your super benefit, you need to make a ‘binding nomination’ and renew it every three years.

Any questions about where you stand?

Making sure your super and insurance continue to match your changing circumstances in life is a critical factor in securing your financial future. If you have any questions about the topics raised in this article, talk with one of our Member Education Consultants who are the experts in your fund. If you want advice specific to your personal financial situation, they can refer you to one of our Financial Advisers.²